Sell Your Krakow Property and Get Rich

No doubt housing
isn't now a seller’s market in Krakow. Nevertheless the
demand for
apartments has outpaced supply in recent years.
Seeing as prices of new flats zoomed up, on an average, by
seventy percent in 2006 alone, it’s little wonder that many
owners of
residential property
still think anything goes. Wrong as they are, the fact remains
that selling an apartment in Krakow remains rather easy
these days as long as the seller proves flexible enough.

Also there is the big demand for houses, and even bigger for
advantageously situated building plots.

As regards the Krakow market for
commercial property, nothing beats
restaurants in the
Old Town
and
Kazimierz
historic districts as appetites of would-be restaurateurs
for floor space there seems insatiable. Except, prices of
retail space at the Old Town’s main streets and the central
Rynek Glowny
are really exorbitant.

How to sell real estate in Krakow

Potential seller of a real property may try to market it
through classified advertisements in local newspapers. But
it requires fairly good command of the Polish language, some
knowledge of the Polish law, and usually a good deal of
time.

On the other hand, one may employ Krakow’s
real estate agents. Especially that some of them
speak good English. And the realtor’s fee is paid, more
often than not, by the buyer. Even as many estate agents in
Krakow insist on exclusivity (it’s always advisable to read
the small print in their contracts), prospect sellers mostly
field their property for sale with several different
realtors unless one of them may offer preferential
treatment.

Legalities

A licensed real estate agent should take care of all legal
matters. Anyway, the transaction needs to be completed with
the help of the local notary public; otherwise the contract
is null and void. The notary’s office retains the deed
(called akt notarialny) for safekeeping while the buyer and
the seller are issued certified copies of the document.

Plus the public notary looks after entering changes into the
land registry (ksiegi wieczyste).

From January 1, 2009 the seller of any real estate is
legally bound to provide an ‘energy certificate’ (swiadectwo
energetyczne in Polish) as required by the EU directives
(the same applies to landlords who rent out their property).
This statement of energy efficiency declares how much power
is needed per year to heat, illuminate, and supply in hot
water the real property in question whether it’s a flat, a
house, an office, an apartment building, a shop, an plant, a
warehouse, or any other bricks and mortar. It should be
issued by a licensed specialist or architect and it’s valid
for ten years.

Costs involved in selling property in Krakow

The notary’s fee is calculated on the worth of transaction.
For instance when the property is priced at anything between
60,000 zlotys
(PLN) and one million zlotys (PLN) the fee totals
PLN 1,010 plus 0.5 percent of the amount above 60,000 PLN.
Thus selling an apartment worth 150,000 PLN entails notary’s
fee to the tune of 1,460 PLN. What’s more, the fee is
subject to 23-percent Value Added Tax (VAT) so the notary
would charge 1,795.8 PLN for the said flat. Separately he
charges 200 PLN plus 46 PLN (i.e. 23 percent) of Value Added
Tax for preparing the application to enter changes into the
land register.

The notary also collects the two-percent stamp duty (podatek
od czynności cywilnoprawnych) slapped on the value of the
sold property and 200 PLN that the district court charges
for an entry in the land register.

The law doesn’t specify which party pays the above costs.
They may be covered by the buyer or the seller or both can
share them. On the strength of the seller’s market the buyer
customarily foots the entire bill.

As a rule of thumb, the above applies also to the
commissions of real estate agents that range from two to
three percent.

Don’t Forget the Tax

The proceeds from selling property in Krakow are subject to
Poland’s income
tax. It applies both to the Polish nationals and
aliens, no matter if they are legal residents or not. The
tax is different when one sells a real estate purchased in
2007 or later than in the case of property obtained before
January 1, 2007. The income tax should be paid within 14
days after the date of the deed. An exception is residential
property owned for at least five full calendar years, i.e.
from January 1 to December 31, as income from its sale
remains free of tax. For instance, the sale of a
real estate purchased in 2008 will be exempt from
the income tax if it will take place in 2014 or later.

When you sell a real estate purchased before January 1, 2007
the entire proceeds are taxed at 10 percent. The 10-percent
income tax is being waived when the taxpayer declares within
14 days that the proceeds from the sale will finance another
home ownership or home improvement in two years or earlier
or he/she has used the money to repay mortgage.

When you sell property acquired in 2007 or later only the
profit, i.e. the difference between the purchase price and
the sale price less the costs of the transaction (see
above), is taxed at 19 percent. Except the income from the
sale of the official permanent abode (zameldowanie na pobyt
staly) for at least 12 preceding months is exempt from the
tax.